Earth Orbit Debris: An Economic Model

Nodir Adilov

Indiana University-Purdue University

Peter J. Alexander

Federal Communications Commission

Brendan Michael Cunningham

U.S. Naval Academy

May 14, 2013

Space debris, an externality generated by expended launch vehicles and damaged satellites, reduces the expected value of space activities by increasing the probability of damaging existing satellites or other space vehicles. Unlike terrestrial pollution, debris created in the production process interacts with firms' final products, and is, moreover, self-propagating. Collisions between debris or extant satellites creates additional debris. We construct an economic model to explore private incentives to launch satellites and to mitigate space debris. The model predicts that, relative to the social optimum, firms launch too many satellites and under-invest in debris mitigation technologies. We discuss remediation strategies and policies, and calculate a socially optimal Pigovian tax.

Number of Pages in PDF File: 25

Keywords: satellite, debris, pollution, externality, space, collision

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Date posted: May 15, 2013  

Suggested Citation

Adilov, Nodir and Alexander, Peter J. and Cunningham, Brendan Michael, Earth Orbit Debris: An Economic Model (May 14, 2013). Available at SSRN: http://ssrn.com/abstract=2264915 or http://dx.doi.org/10.2139/ssrn.2264915

Contact Information

Nodir Adilov
Indiana University-Purdue University ( email )
Nefff 340
2101 E. Coliseum Blvd.
Fort Wayne, IN 46835
United States
Peter J. Alexander (Contact Author)
Federal Communications Commission ( email )
Washington, DC 20554
United States
Brendan Michael Cunningham
U.S. Naval Academy ( email )
Department of Economics
589 McNair Road
Annapolis, MD 21402
United States
410-293-6894 (Phone)
508-302-2596 (Fax)
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